strategic plan - kericho

Maji Safi Kila Wakati

KERICHO WATER AND SANITATION COMPANY LTD

STRATEGIC PLAN

2017 – 2022

AUGUST 2017

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan i

Chairman’s Remarks In 2016, Kericho Water and Sanitation Company, for the very first time was awarded the winner in water

category during the annual Champions of Governance Award This award gave impetus to the Board of

directors and Management team of KEWASCO who sought to set their horizon further through

development of a number of policies. Board of Directors and senior management staff are bound by code

of ethics that assures suppliers of due diligence in keeping with the Company’s goal of strengthening its

corporate governance.

Apart from this Strategic Plan, the Board has approved development of a number of policies such as Anti-

corruption policy, service charter, Communication Plan, Pro Poor policy, Whistle blowing policy among

many others. In order for the company to provide quality services and create a niche within the country,

we are committed to ensuring that all stakeholders receive water regularly, efficiently and that the water

they receive is of good quality and quantity as per the provisions of Constitution of Kenya 2010. The

Company aspires to be a leading and self-sustaining water and sanitation service provider in Kenya.

The mandate of KEWASCO is to provide water and sanitation services in the Company’s areas of

jurisdiction. Since the Company is run on commercial principles, staff and management are integrated

into a competitive and pro-active team with a common goal.

We have kept on adopting and mastering use of GIS applications. In addition, we have embraced use of

ICT which has seen us integrate mobile money transfer, mobile meter reading, SMS services and cashless

transactions.

I am pleased to announce that KEWASCO and TILWASCO merger is the best thing that has happened to

the Company. The advantages include economies of scale, commercial viability, and waste minimization

and ease of resources mobilization.

In preparation of this Strategic Plan, the role and dedication of the management team will not go

unnoticed. Much thanks goes to the CMT from the merged water utility for supporting the Consultant to

ensure this Strategic Plan was professionally prepared.

I look forward with confidence that we are going to walk together to achieve our vision and objectives.

Eng. Kipsuge arap Soi Chairman, Board of Directors.

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan ii

Foreword by the Managing Director Water is a common heritage, the value of which must be recognized by all. Everyone has the duty to use water carefully and economically. “European Water Charter”

It gives me great pleasure to write this foreword for Kericho Water and Sanitation Company Ltd

(KEWASCO) Strategic Plan 2017-2022. This Strategic Plan has been carefully prepared taking cognizance

of the merger between the former KEWASCO and TILWASCO Water and Sanitation Companies. The Plan

seeks to comply with the requirements of the Constitution of Kenya 2010, Water Act 2016, Vision 2030,

Sustainable Development Goals and associated regulations and prescribed Corporate Governance

guidelines issued by Water Services Regulatory Board.

Since its formation in 1997 and subsequent formal commencement of operations in 2003, KEWASCO has

strived to strategically position itself to provide quality water and sanitation services in conformity with

the provisions of Constitution of Kenya, 2010 section 43 (1) (d) -on economic and social rights which

provides every Kenyan with a right to clean and safe water in adequate quantities.

The Company strives to be a leading and self-sustaining water and sanitation service provider in Kenya. It

is with this vision in mind that the Strategic Plan has been prepared anchoring its successful

implementation to adherence to the five core values of team work, integrity, professionalism, innovation

and customer focus. We will put stakeholder satisfaction in mind by ensuring that the service we offer is

exemplary and meets their expectations through enhanced efficiency and effectiveness in resolving

customer complaints in conformity to the Customer Service Charter.

This Strategic Plan puts great emphasis on the organization’s future outlook which focusses on

infrastructure improvement, increased water coverage, increased collection efficiency, prompt repairs of

bursts and leakages, increased metering ratio, upgrade of raw water schemes into fully treated water

schemes and increased sanitation coverage so as to realize the five thematic areas namely (i) Water and

Sanitation Provision, (ii) Operational efficiency, (iii) Financial sustainability, (iv) Collaboration with Sector

players and lastly (v) Customer service.

Successful implementation of this strategic plan will imminently be faced with a major challenge of

continued purchase of bulk water from Bomet County which is purchased inclusive of Non-Revenue

Water losses now still at over 55%. The other challenge is the different tariff structure for borehole water,

pumped water and gravity fed water in the same supply area. However, the tariff review for the new

KEWASCO is expected to enable the merged company to remain financially viable provided it receives the

proposed subsidy per month required to support the rural based water schemes (Tililbei Cost Centre) to

meet electricity costs to improve on its infrastructure network such distribution, metering, treatment of

raw water and GIS mapping.

During this five year Plan, a new Kimugu Water Treatment plant and Kusumek Mini Hydro and water

treatment plant will be constructed through external financing. The two projects will augment the current

water production to ensure sustainable water supply to urban and rural areas.

Mindful of the impacts of climate change, and the accompanying reduction in water quality and quantity

during droughts, KEWASCO will invest in initiatives that conserve water and energy resources including

reforestation of watersheds, explore solar power and wind energy. The Company is also exploring

generation of electricity and production of briquettes using sludge at its Sewerage Treatment Plants.

On capacity building, the Company will endeavour to train, motivate and retain the staff with the best

requisite talent and provide the best working environment. Furthermore, KEWASCO will continue to

deepen implementation of the Human Resources Policy, notably through internship opportunities,

employee and leadership development plans and through partnerships with universities, technical and

vocational and educational training institutions (TVED). The Company also seeks to strengthen corporate

governance and risk management through adherence to good corporate governance principles and

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan iii

enhanced systems of internal control. We aspire to remain relevant, sustainable and competitive through

embracing innovation, putting emphasis on corporate governance and ensuring that we put our

customers’ interest first.

The planned activities will not be successfully implemented without synergy and complimentarity by

stakeholders. In this regard, KEWASCO will continue to collaborate with Lake Victoria South Water

Services Board, herein referred to as Water Works Development Agency, the Department of Water,

Environment, Energy, Forestry and Natural Resources for adequate water resources to be developed

including, completion of the new Kimugu Water Treatment Plant and Kusumek project. The Company will

further continue to manage its existing water supplies with the utmost care, whilst exploring alternative

sources, including embarking on a feasibility study for a water storage reservoir.

The resource envelope required to implement this plan will be KShs 4.3 Billion. This will be financed

majorly by the Company’s internal revenues, loans, County Government subsidy and asset development

funds from Water Works Development Agency. This budget will be reviewed at Mid-term to factor in the

effects of inflation.

Last but not least, may I call upon political leadership, customers and other stakeholders to continue

giving us the support required to execute the planned activities so that we achieve the desired objectives.

Together we shall take water and sanitation provision to the next level.

Thank you and God Bless the Shareholder, God bless our customers, suppliers and Partners, God bless

KEWASCO.

Eng. Joseph K. Terer Managing Director

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan iv

LIST OF ACRONYMS AND ABBREVIATIONS BoD – Board of Directors

CBD – Central Business District

NG_CDF _ National Government Constituency Development Fund

CSR – Corporate Social Responsibility

CGoK - County Government of Kericho

ERM _ Enterprise Risk Management

GIS – Geographic Information System

GoK – Government of Kenya

GPS _ Global Positioning System

HOD - Head of Department

HTS - Head of Technical Services

HF&CS - Head of Finance & Commercial Services

HR – Human Resource

HRM - Human Resource manager

ICT – Information Communication and Technology

KEWASCO – Kericho Water and Sanitation Company Ltd

KPI – Key Performance Indicator

MD - Managing Director

M & E – Monitoring and Evaluation

MoU _ Memorandum of Understanding

MWI _ Ministry of Water and Irrigation

NRW – Non Revenue Water

NWMP _ National Water Master Plan

O&M – Operation and Maintenance

PESTEL – Political, Economic, Socio-cultural, Technological, Ecological

and Legal

SDGs _ Sustainable Development Goals

SPA _ Service Provision Agreement

TILWASCO - Tililbei Water and Sanitation Company Ltd

TNA _ Training Needs Assessment

LVSWSB – Lake Victoria South Water Service Board

VAT _ Value Added Tax

WAB – Water Appeals Board

WT - Water Tribunal

WARREC _ Water Research and Resource Center

WASREB – Water Services Regulatory Board

WWDA - Water Works Development Authority

WHO – World Health Organization

WRA - Water Resource Authority

WRMA – Water Resources Management Authority

WSB – Water Services Board

WSP – Water Services Provider

WSTF – Water Services Trust Fund/Water Sector Trust Fund

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan v

TABLE OF CONTENTS

CHAIRMAN’S REMARKS ................................................................................................................................ I

FOREWORD BY THE MANAGING DIRECTOR ....................................................................................... II

LIST OF ACRONYMS AND ABBREVIATIONS ........................................................................................ IV

EXECUTIVE SUMMARY .............................................................................................................................. VII

CHAPTER ONE ................................................................................................................................................. 1

INTRODUCTION ............................................................................................................................................... 1

1.1 BACKGROUND ........................................................................................................................................ 1 1.1.1 BACKGROUND OF FORMER KEWASCO .................................................................................................. 1 1.1.2 BACKGROUND of TILWASCO .................................................................................................................. 2 1.1.3 BACKGROUND OF THE COMPANY ......................................................................................................... 3

1.2 KEWASCO’S CONTRIBUTION TOWARDS VISION 2030 AND SUSTAINABLE

DEVELOPMENT GOALS ....................................................................................................................... 3 1.3 RATIONALE FOR THE STRATEGIC PLAN ........................................................................................ 4 1.4 EXPECTED OPERATING ENVIRONMENT/PLANNING ASSUMPTIONS ................................. 4 1.5 PROCESS OF DEVELOPING THE PLAN ........................................................................................... 5

CHAPTER TWO ................................................................................................................................................ 7

INSTITUTIONAL REVIEW ............................................................................................................................. 7

2.1 MANDATE AND CORE FUNCTIONS .................................................................................................. 7 2.2 VISION ........................................................................................................................................................ 7 2.3 MISSION .................................................................................................................................................... 7 2.4 CORE VALUES ......................................................................................................................................... 8

CHAPTER THREE ........................................................................................................................................... 9

SITUATIONAL ANALYSIS .............................................................................................................................. 9

3.1 WATER SECTOR ANALYSIS ................................................................................................................. 9 3.2 EVALUATION OF PAST PERFORMANCE ....................................................................................... 10

3.2.1 Implementation of 2013 – 2017 Strategic Plan ................................................................................... 10 3.2.2 Financial Performance ......................................................................................................................... 13 (a) Income Statement ....................................................................................................................................... 13 (b) Statement of Financial Position .................................................................................................................. 16 3.2.3 Non-Financial Performance ................................................................................................................. 19

3.3 ENVIRONMENTAL ANALYSIS ........................................................................................................... 20 3.4 STAKEHOLDER ANALYSIS ................................................................................................................ 23

CHAPTER FOUR ............................................................................................................................................ 27

STRATEGIC ANALYSIS ................................................................................................................................ 27

4.1 STRATEGIC THEMES .......................................................................................................................... 27 4.2 STRATEGIC OBJECTIVES AND STRATEGIES ............................................................................ 31

CHAPTER FIVE .............................................................................................................................................. 36

IMPLEMENTATION PLAN ........................................................................................................................... 36

5.1 IMPLEMENTATION THEMES AND OBJECTIVES ............................................................................. 36 5.2 STRATEGIC PLAN IMPLEMENTATION COORDINATOR ................................................................. 45

CHAPTER SIX................................................................................................................................................. 46

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan vi

INSTITUTIONAL STRUCTURE................................................................................................................... 46

CHAPTER SEVEN .......................................................................................................................................... 47

STRATEGIC FINANCIAL PLAN .................................................................................................................. 47

7.1 FUNDING ALTERNATIVES .......................................................................................................................... 47 7.2 STRATEGIC FINANCIAL PLAN .................................................................................................................... 47 7.3 MEDIUM TERM FINANCING PLAN ............................................................................................................ 50 7.4 LONG-TERM FINANCING PLAN ................................................................................................................. 50

CHAPTER EIGHT........................................................................................................................................... 52

MONITORING AND EVALUATION ............................................................................................................ 52

8.1 OBJECTIVES OF MONITORING AND EVALUATION ................................................................. 52 8.2 MONITORING AND EVALUATION (M & E) FRAMEWORK ........................................................ 52 8.3 KEY PERFORMANCE INDICATORS ................................................................................................ 53 8.4 ACCOUNTABILITY AND RISK MANAGEMENT ............................................................................. 54

ANNEXES ......................................................................................................................................................... 57

ANNEX 1 ............................................................................................................................................................... 57

LIST OF TABLES Table 1: Implementation of previous KEWASCO Strategic Plan .............................................. 10 Table 2: Implementation of previous TILILBEI Strategic Plan ................................................. 12 Table 3: The Former KEWASCO Income Statement ............................................................... 14 Table 4: TILILBEI Income Statement ..................................................................................... 14 Table 5: The Former KEWASCO Statement of Financial Position ........................................... 16 Table 6: TILWASCO Statement of Financial Position ............................................................ 18 Table 7: KEWASCO Non-Financial Performance .................................................................... 19 Table 8: KEWASCO Stakeholders ......................................................................................... 23 Table 9: KEWASCO Strategic Objectives ............................................................................... 31 Table 10: Strategic Financial Plan ........................................................................................ 47 Table 11: Source of Funds for Strategic Plan ......................................................................... 50 List of Figures Figure 1: The Former KEWASCO income statement .............................................................. 14 Figure 2: TILILBEI income statements .................................................................................. 15 Figure 3: KEWASCO Statement of Financial Position ............................................................ 17 Figure 4: TILWASCO Statement of Financial Position extracts ............................................... 19

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan vii

EXECUTIVE SUMMARY

Kericho Water and Sanitation Company Limited (KEWASCO) is a clustered

company consisting of the former Tililbei Water and Sanitation Company

Limited (TILWASCO), a rural based scheme that covered nine schemes namely

Kapkatet/Litein, Sosiot, Kipkelion, Chesinende, Londiani, Fort Ternan,

Kipsitet, Bargeiywet and Sigowet, and the former Kericho Water and Sanitation

Company Limited (KEWASCO), which formerly was mandated to provide water

and sanitation services within the urban and Peri urban areas of Kericho town.

The core mandate of merged KEWASCO is to provide Water and Sanitation

Services to the whole of Kericho County. KEWASCO’s joint mandated area of

coverage is over 2,454 km2 while the area currently supplied with water is

estimated to be 291 km2.

The Kenya Constitution 2010 provides water and sanitation as an economic

and social right as stipulated under Article 43 (1) (d) that every person has a

right to clean and safe water in adequate quantities. Further, the Vision 2030

aims at increasing accessibility to sustainable, quality and affordable water

and sanitation services. In line with this goal, and in order to meet the demand

for water by the rapidly growing population, KEWASCO sought to come up with

a road map for the next five years. This resulted in preparation of Strategic

Plan 2018 – 2023 which is tailored towards achieving its mandate and

objectives. The Corporate Strategic Plan was developed through a participatory

approach which ensured that views of the key stakeholders were incorporated.

A review of the Company’s vision, mission and core values was undertaken. A

situational analysis was also carried out to evaluate the past performance, and

the internal and the external environments in which the Company operated.

These analyses enabled the isolation of the key strategic issues that require

management intervention during the strategic planning period. The identified

strategic themes formed the basis for setting of objectives for the next five

years.

Kericho Water and Sanitation Company 2017– 2022 Strategic Plan viii

The strategic themes identified are:

1. Non-Revenue Water (NRW) 2. Water and Sewerage infrastructure 3. Operational efficiency 4. Financial sustainability 5. Customer service 6. Institutional restructuring

To deliver on the identified strategic themes, the Company identified strategic

objectives that would enable it fulfil its mission. These are:

i. To reduce the Non-Revenue Water from 50% in 2018 to 30% by 2023

ii. To increase water production from 16,000 m3 per day to 32,000 m3 per

day by 2023

iii. To increase sanitation coverage from 40% to 60% by 2023.

iv. Improve on operation efficiency to meet all WASREB targets by 2023

v. To increase revenue from Kshs. 204 million in 2018 to Kshs. 400 million

by 2023.

vi. To improve collection efficiency from 92 % in 2018 to 98% by 2023

vii. To increase customer satisfaction by 10% annually

viii. Operationalize institutional restructuring of the merged KEWASCO and

TILWASCO to one highly performing water utility by 2023.

ix. To have a qualified, experienced, motivated workforce

Strategies to achieve these objectives were set and for each strategy, the

expected output, action areas, implementing actors, resource requirement,

time frame and output indicators were determined. These have been

documented in an implementation matrix presented in Chapter Five of this

Strategic Plan.

To help ensure successful implementation of the Strategic Plan a monitoring

and evaluation (M&E) framework has been provided in Chapter Seven. To guide

the operationalization of the M&E, annual key performance indicators that will

help to track progress towards the achievement of the set objectives were

identified and documented.

Kericho Water and Sanitation Company Ltd 2017 – 2022 Strategic Plan 1

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND

The County Government of Kericho (CGoK), in its endeavour to effectively serve

its residents with water and sanitation services, spearheaded merger of the two

Water utilities within the County namely Kericho Water and Sanitation

Company Ltd, (KEWASCO), (a large and urban based water utility) and Tililbei

Water and Sanitation Company Ltd, (TILWASCO), (a medium and rural based

water utility). This is also in tandem with the CGoK vision of having a diverse

and dynamic community with a healthy economy and environment where

all people and businesses have the opportunity to thrive. The new

Company has jurisdiction over the entire Kericho County.

1.1.1 BACKGROUND OF FORMER KEWASCO

Kericho Water and Sanitation Company Ltd (KEWASCO) was a Private Limited

Company established under the Company’s Act Cap 486, Laws of Kenya, by

ordinary share capital by Kericho Municipal Council in October 1997. With

promulgation of the new Constitution 2010, the Company’s shareholding was

transferred to County Government of Kericho (CGoK), and thus wholly owned

by CGoK and operated under Lake Victoria South Services Board.

Formerly, KEWASCO was contracted by Lake Victoria South Water Service

Board (LVSWSB) to provide Water and Sanitation Services within the County

Government of Kericho and its environs. However, following the enactment of

Water Act 2016, this mandate has since been transferred to Water Works

Development Agency (WWDA).

The former KEWASCO’s mandated area of coverage was 144 Km2 while the

actual area supplied with water was estimated to be 126 Km2. The total

population living within the Company’s area of jurisdiction was estimated to be

175,626 out of which 98,780 people were being served by the Company

(WASREB Impact Report, No. Issue 9/2016).


The former KEWASCO had three main water schemes namely: Kimugu

Treatment Works with a design capacity of 4,000m3 per day, Kapcheptoror

Water Treatment Works with a design capacity of 8,800 m3 and Ngecherok

Production Plant with a Design Capacity of 300m3 per day. The daily water

demand in the former KEWASCO’s coverage area was 14,000 m3 per day

against a then daily production of 11,000m3 per day.

The former KEWASCO had approximately 4,930 sewer connections and only a

small area of Kericho town of approximately 2.5km² has a pipe borne sewerage

system that was first commissioned in 1962 but had subsequently been

improved. The sewerage system comprised of piped collection system and a

centralized waste water treatment plant covering Central Business District

(CBD) and a few settlement areas around the built up areas. The sewerage

treatment plant which had both the conventional and biological systems of

treatment, had a design capacity of 990m³/day Dry weather Flow but on a day

to day basis, the average inflow was about 450m³/day i.e. 45% of the design

capacity, serving only 25% of the served population . The treated influent is

discharged into the natural waterway.

1.1.2 BACKGROUND of TILWASCO

Tililbei Water and Sanitation Company Ltd (TILWASCO) was a Private Limited

Company established under the Company’s Act Cap 486, Laws of Kenya, by

ordinary share capital, established on 5th August 2011. TILWASCO was

contracted by Lake Victoria South Water Services Board (LVSWSB) on 26th

June 2011 to provide Water and Sanitation Services within Kericho and Bomet

Districts which were formerly under the mandate of Chemosit Water and

Sanitation Company Limited. However, following devolution, Bomet Water and

Sanitation Company Limited was formed to serve Bomet County, while

TILWASCO remained to serve parts of Kericho County.

TILWASCO’s mandated area of coverage was 5,000 km2 but the actual area of

coverage was165 km2. The total population living within the Company’s area of


jurisdiction was estimated to be 182,628 out of which 118,512 people were

being served by the company (WASREB Impact Report, No. Issue 9/2016).

TILWASCO used to receive bulk water from Bomet Water and Sanitation

Company which was supplied to Litein and Kapkatet towns. The Agreement

with Bomet Water and Sanitation Company was to supply 4000 m3 of water per

day, however, the water actually supplied was less than the agreed volume.

TILWASCO also operated eight other water schemes across its area of

jurisdiction as annexed.

1.1.3 BACKGROUND OF THE COMPANY

Kericho Water and Sanitation Company Limited (KEWASCO) is a clustered

company consisting of the former Tililbei Water and Sanitation Company

Limited (TILWASCO), a rural based scheme that covered nine schemes namely

Kapkatet/Litein, Sosiot, Kipkelion, Chesinende, Londiani, Fort Ternan,

Kipsitet, Bargeiywet and Sigowet, and the former Kericho Water and Sanitation

Company Limited (KEWASCO), which formerly was mandated to provide water

and sanitation services within the urban and Peri urban areas of Kericho town.

1.2 KEWASCO’S CONTRIBUTION TOWARDS VISION 2030 AND

SUSTAINABLE DEVELOPMENT GOALS

Kenya’s long-term development agenda is set out in the Kenya Vision 2030.

The aim of the Vision is to make Kenya a globally competitive and prosperous

country by transforming it into an industrialized middle-income Nation,

providing a high-quality life for all its citizens in a clean and secure

environment. KEWASCO has an important role to play in the realization of

Vision 2030 and Sustainable development Goals (SDGs) through provision of

water to residents, institutions, commercial entities and industries within

Kericho County. The most relevant SDG for KEWASCO is Goal Number 6 –

Ensure availability and sustainable management of water and sanitation

for all. The goal has eight targets that are expected to be achieved by 2030.


To fulfil its mandate, there is need to develop and sustain linkages and

collaborations with National and County Government, other Government

institutions including the Ministry of Water and Irrigation (MWI), Water

Services Regulatory Authority (WASREB) and other institutions provided for in

the Water Act, 2016.

1.3 RATIONALE FOR THE STRATEGIC PLAN

The expiration of the current Strategic Plan (2013-2017) and the merger of the

former KEWASCO and TILWASCO necessitated development of a new Strategic

Plan that will enable the merged KEWASCO to adopt a proactive approach in

the discharge of its mandate. The Strategic Plan will also enable KEWASCO to

evaluate alternative strategies and select the best strategies for achieving its

objectives in the planning period. The Strategic Plan builds on the lessons

drawn from the implementation of the previous strategic plans.

With this Strategic Plan in place, the Company will be able to focus on the

most important aspects of its business and to determine the most efficient way

of utilizing its resources within competing budgetary requirements. Thus, this

Strategic Plan provides a framework for prioritization and allocation of

resources during the planning period. The strategic planning process is

participatory thus involving key stakeholders, which enhances stakeholders’

motivation and support during implementation. Further, the process facilitates

information and knowledge sharing among stakeholders hence better planning

and coordination of Company operations and activities. The Strategic Plan also

provides the basis for developing short term objectives and goals as well as

developing policies and regulations to govern or to control operations such as

operating Policy Manuals.

1.4 EXPECTED OPERATING ENVIRONMENT/PLANNING ASSUMPTIONS

In developing the Strategic Plan, the following assumptions were made:


i. There will be sustained good working relationship between the Company

and Stakeholders.

ii. There will be continued cordial relationships with Development Partners

iii. There will be political, social and economic stability in the country/County.

iv. There will be no adverse changes in legislation and government policies.

v. The period after the merger will be cordial and harmonious.

1.5 PROCESS OF DEVELOPING THE PLAN

Participatory strategic planning process was used in developing the Strategic

Plan. This ensured incorporation of the views of the various stakeholders in the

resulting Plan. The process entailed consultations with Management and the

Board of Directors. Specifically, the methodology comprised of the following:

1.5.1 Document Review

Various documents were reviewed for the purpose of extracting relevant

information for use in the strategic plan. These documents included:

i. KEWASCO 2013 – 2017 Strategic Plan;

ii. TILWASCO 2007 – 2012 Strategic Plan;

iii. Financial and other performance reports;

iv. LVSWSB-KEWASCO Service Provision Agreement;

v. LVSWSB-TILWASCO Service Provision Agreement;

vi. Water Act, 2016;

vii. WASREB Circular on Commencement of the Water Act, 2016;

viii. WASREB Impact Reports;

ix. Kenya Vision 2030; and

x. Sustainable Development Goals (SDGs).

1.5.2 Pre-Workshop Discussions

Discussions were held with the management of the two water utilities. The

interviewees provided their input on the strategic direction to be taken by the

Company, which informed the Strategic Plan preparation.

1.5.3 Strategic Planning Workshops


To incorporate views of stakeholders and in order to enhance ownership of the

Strategic Plan, the following workshops were held:

i. A two-day strategic planning workshop with staff which culminated in a

draft Strategic Plan; and

ii. Two days strategic planning workshop with the Board and Management

to refine the draft Strategic Plan.


CHAPTER TWO

INSTITUTIONAL REVIEW

2.1 MANDATE AND CORE FUNCTIONS

2.1.1 Mandate

The Mandate of KEWASCO is to provide water and sanitation services in the

Company’s areas of jurisdiction.

2.1.2 Core Functions

The core functions of KEWASCO as stipulated in the Company Memorandum

of Association and Service Provision Agreement (SPA) are:

a. Water supply and Sewerage infrastructure development;

b. Abstraction, treatment, distribution of water and provision of sanitation

services

c. Commercial and Financial management (Meter reading, billing, revenue

collection and prudent management of financial resources).

d. Extension, Rehabilitation and Renewal of the infrastructure.

In addition, KEWASCO is also expected to participate in the conservation of

water resources in liaison with Water Resources Authority (WRA), Water

Resource Users Association (WRUA), Basin Water Resource Committees

(BWRC), the County Government of Kericho (CGoK), Development Partners,

Kenya Forest Services and other institutions and stakeholders.

2.2 VISION

To be a leading and self-sustaining Water and Sanitation Service Provider in Kenya.

2.3 MISSION

To effectively provide sustainable water and sanitation services to our customers in a safe, reliable, adequate and affordable manner.


2.4 CORE VALUES

The Company has developed five core values namely; Team Work, Integrity, Professionalism, Innovation and Customer focus (TIPIC). These are highlighted below:

i). Team Work

KEWASCO staff will work as a committed team in realizing the

Company’s goals.

ii). Integrity

We uphold the highest ethical standards, demonstrating honesty and

fairness in all our operations. We are committed to efficient use of

resources and being accountable for our actions.

iii). Professionalism

We will take a professional and objective approach in all operations. We

will uphold competence, high standards, reliability and excellence in our

work.

iv). Innovation

KEWASCO recognizes that innovation is key in improving service

delivery. The Company is therefore committed to fostering creativity and

embracing innovation in the entire work force.

v). Customer Focus

We recognise that our customers are the reason why we exist. We

endeavour to provide high quality services in a timely manner which

exceed customer expectations and honour commitments that we have

made to them.

Kericho Water Supply and Sanitation Company Ltd 2017 – 2022 Strategic Plan 9

CHAPTER THREE

SITUATIONAL ANALYSIS

3.1 WATER SECTOR ANALYSIS

Kenya's population is estimated to be 46.1 million in 2017 and projected to

increase by 1 million per annum to approximately 51 million by the year 2022.

Out of the total population, only 20 million reside in areas currently served by

the 86 regulated utilities, with a total of 1.4 million connections. It is projected

that by year 2030, the population in these service areas will increase to 45

million. By 2014/15 Kenya’s water coverage stood at 55%. During the same

period Non-Revenue Water (NRW) in the country was at 43% an increase from

42% in 2013/14. Thus, effective NRW management is the bedrock of

operational sustainability which will translate to increased revenue.

(Sometimes it may only result to increased available water)

On the other hand, sewerage coverage dropped from 16% in 2013/14 to 15% in

2014/15. This is a low coverage considering that population has been

increasing rapidly. To attain the sector target of 100% sewer coverage for the

urban population, the sector requires an average growth in sewer connections

of approximately 350,000 which translates to 3.2 million people annually. It is

clearly evident that the resource requirements to attain the 2030 target are

enormous and the sector should explore different models of financing sewerage

infrastructure.

According to the Kenya Water Master Plan, 2030, the budget requirements to

make water and basic sanitation available to all by 2030 is Kshs 1.7 trillion

against the available government budget of Kshs 592.4 billion. This leaves a

shortfall of Kshs 1.2 trillion. To bridge this gap, there is need for increasing

sector efficiency, maximising consumer contributions through tariffs, and

encouraging private sector funding. In a bid to enhance access to commercial

financing, WASREB in conjunction with World Bank Water Global developed a

Creditworthiness Index for large utilities, as well as tool kits on commercial

lending to the water and sanitation sector for the three main stakeholders


(utilities, commercial banks and county governments). The purpose of the

Creditworthiness Index is to provide lenders with a snap-shot of the financial

and operational performance of utilities across the sector.

3.2 EVALUATION OF PAST PERFORMANCE

3.2.1 Implementation of 2013 – 2017 Strategic Plan

A summary of the achievements made in each of the key strategic areas of the

2013 – 2017 Strategic Plan for the Former KEWASCO is presented in Table 1.

Table 1: Implementation of previous KEWASCO Strategic Plan

OBJECTIVE STRATEGY ACHIEVEMENT

To achieve an Optimal, Motivated and Productive Workforce

Staff skills analysis No achievement has been made on this objective

Staff training and development

Training in GIS, NRW, Plumbing, ICT, preparation of Financial statements, customer care, and Audit carried out

Job valuation/organization review

A job evaluation was not conducted, and it is of paramount importance for it to be done now that KEWASCO and TILWASO have merged.

To ensure an efficient and effective water supply and sanitation

Fully equipped laboratories

Rehabilitate the treatment plants

Calibrate the bulk meters Fully equip the production

sector with electrochemical equipment

Introduce a software for monitoring water quality

Automate bulk meters Automate zonal bulk

meters Rehabilitate the old

distribution network in town

Sensitize customers on way leaves

Replace old meters Introduce double chamber

meter boxes

Timbilil Laboratory partially equipped

Timbilil, Kimugu and Ngecherok Treatment Plants have been rehabilitated

Bulk meters calibrated The Water Production section has

been equipped with electrochemical equipment

NRW team has been established to curb water losses

Waste Water Treatment plants are undergoing rehabilitation

Customer identification survey carried out

Old distribution network rehabilitated with HDPE and PPR pipes

Currently sensitization of customers on way leaves is ongoing

Old meters replaced Curb illegal water use and prevent

meter theft



To enhance capacity of supplying

Fix mobile meter reading Use SMS for billing and

customer enquiries (complaint and balance)

KEWASCO will develop a customer service policy and procedures manual

KEWASCO will develop and implement a Cost-Reduction Strategy

Enhance new meters stock level to match demand

Develop and implement a Records Management Policy and ensure adequate infrastructure for proper records management

Develop and install a Quality Management System ISO 9001:2008

Mobile Meter Reading is operational SMS billing has been introduced Customer service policy and

procedures manual are not yet developed.

Cost Recovery Strategy not developed

Meter stocked appropriately Records Management Policy not

developed but the Company is operating under Corporate Policy.

KEWASCO is yet to be ISO 9001:2008 Certified

To embrace Information Technology in all areas of operation

Training and development of staff

Purchase of computers Add new modules to the

new billing system Network the offices Create user access rights

on each folder Modify website to allow

customers to log in, make inquiries, check balances, raise complaints

Purchase an ERP to integrate HR, Accounting, Payroll, Stores, Clock in system and Budget system

Install VPN to staff Purchase data loggers Conduct automation

survey

Staff training conducted in all sections

Laptops and Computers purchased New modules eg Mpesa, SMS,

Mobile Meter Reading and GIS added

Offices networked New access rights created in each

folder Website modified and customers

can check balances and raise complaints

ERP procured and integrates well with Accounts, Payroll and HR

Masts and radios installed instead of VPN

Mobile Meter Reading purchased instead of Data Loggers

Automation Survey conducted

To enhance financial sustainability and commercial viability

Increase meter connections

Reviewing tariffs to cover all operation and maintenance costs

Reduce UFW Adopt cost-cutting

measures

Increasing meter connections and reduction of NRW is currently on going

Tariff reviewed to 2015-2018 NRW is still high but the worst

areas have been identified and isolated as sub –DMA’s, plans to install pressure reducing valves



Comply with the service charter on response time to new connections

and replacement of UPVC pipes is still ongoing

Compliance with service charter is currently halfway but response time to new connections is still not timely

Based on the information provided, the implementation of the Strategic Plan

2013-2017 is at least 65%. Effort in infrastructure improvement has been

made, with substantial effort in improving the welfare of employees and

customers. Acquisition of ISO 9001-2015 would improve business efficiency

and customer satisfaction. Whereas tariff review would enhance financial

sustainability. Similarly, staff analysis, job evaluation/organization review

would enhance staff productivity.

A summary of the achievements made in each of the key strategic areas of the

2007 – 2012 Strategic Plan for TILILBEI (formerly CHEMOSIT) is presented

below

Table 2: Implementation of previous TILILBEI Strategic Plan OBJECTIVE STRATEGY ACHIEVEMENT

Improve access to quality water

Undertake rehabilitative initiatives to eradicate wastage, misuse and UFW

Realized through acquisition of portable laboratory equipment,

Composite filtration units were constructed in Bomet town and Olbutyo.

Acquisition of pump sets and improved distribution network in Bomet town

To improve access to sanitation services

Dig pits and septic tanks in trading centers and acquire three exhausters.

One exhauster acquired for waste water collection

To optimize operations Increase storage facilities and pumping hours

Metering unmetered

customers Introduction of gravity

schemes Preventative maintenance

will be structured into operations

Constructed four storage tanks in Bomet, Londiani, Kipkelion and Litein schemes

Increased metering of customers from 20%-to 28%.

No gravity system was developed

Preventive maintenance schedule developed


To improve quality and reliability of service

Train staff on customer service

Customer satisfaction

mechanisms will be put in place

A number of training was carried out on customer care and meter reading

Customer satisfaction survey was not carried out

To establish a strong and well managed organization

Enhance leadership and governance at Board and Management levels

Human Resource Development

Boards of Directors were trained on governance issues.

Training of staff in performance management, meter reading.

To achieve operational financial sustainability

Mobilize adequate financial resources from user fees

The tariff was approved but was not gazetted, hence the company depended on subsidies from the National Government

To enhance stakeholder awareness on water sector reforms

Engage stakeholders Undertake sensitization

campaigns

Stakeholder fora were held in all schemes

Sensitization campaigns were conducted at the scheme level.

To integrate gender and HIV/AIDS concerns in operation

Put in place a policy that is gender sensitive and addresses previous imbalances

The company is in conformity to the 1/3rd gender rule.

Sensitization on HIV/AIDs undertaken at Kapkatet headquarter.

About 60% of the target of the Strategic Plan were achieved. Corporate

governance training for Board Members was conducted. However, the request

for tariff review was approved but not gazetted, therefore the Company went

into financial constraints. Performance measures in the previous Strategic Plan

are not clear to make an accurate assessment of implementation status of the

Strategic Plan.

3.2.2 Financial Performance

A review of the Former KEWASCO’s and TILWASCO’s financial performance was

undertaken through an analysis of the audited accounts for years 2012/2013

to 2015/2016 and the unaudited accounts for 2016/2017. The results are as

follows:

(a) Income Statement

I. The Former KEWASCO Income Statement

The results of the analysis of the income statements for the Former KEWASCO

for the period from year 2012/13 to 2016/17 captured in Table 3.


Table 3: The Former KEWASCO Income Statement

2012/13 2013/14 2014/15 2015/16 2016/17

Kshs Kshs Kshs Kshs Kshs

Total Income 133,286,078 147,815,928 151,224,058 159,108,784 160,320,500

Annual Income growth (percentage)

11% 2% 5% 1%

Expenses

Administration and establishment expenses

96,046,620 98,061,883 118,770,472 123,797,095 126,967,850

Cost of sales 49,878,647 49,878,647 46,975,414 56,557,700 34,695,230

Total Expenses 145,925,267 147,940,530 165,745,886 180,354,795 161,663,080

Administration and establishment expenses growth

1% 12% 9% (10%)

Figure 1 below shows extracts from the former KEWASCO’s financial

statements.

Figure 1: The Former KEWASCO income statement

Over the last five years, total income and administration and establishment

costs have generally been increasing steadily. Cost of sales have generally been

increasing with the exception of the 2016/17 financial year where it decreased

by 10%.

II. TILILBEI Income Statement The results of the analysis of the income statements for TILILBEI for the period

from year 2012/13 to 2016/17 captured in Table 4.

Table 4: TILILBEI Income Statement

2012/201

3

2013/14 2014/15 2015/16 2016/17


0

50,000,000

100,000,000

150,000,000

200,000,000

2012/13 2013/14 2014/15 2015/16 2016/17

Total Income

Administration andestablishment expenses

Cost of sales


Revenue

Sales 56,355,677

34,641,848 30,821,144 28,379,29

8 33,087,91

5

Grants from National/ CGoK

27,875,685

9,322,035 5,117,134 52,480,17

3 28,391,41

7

Other income 7,993,913 (4,355,035) 2,919,142 1,360,579 2,652,688

Total revenue 92,225,275

39,608,379 38,857,419 82,220,05

0 64,132,02

0

Operating expenses

Administration costs 37,253,694-

34,278,342 29,734,518 27,385,43

1 29,031,31

3

Operation and maintenance costs

48,578,803-

32,365,764 30,279,125 29,711,12

9 32,958,46

6

Depreciation of property plant and equipment

115,523- 135,222 149,432 314,850 992,818

Cost of sales

Amortization of Intangible assets

175,200 37,740 150,960 - 68,135

Total operating expenses

86,122,920

66,817,068 60,314,035 57,411,41

0 63,050,73

2

Operating profit (loss) -

(27,208,689)

(21,456,616)

24,808,640

1,081,289

Finance income 31,794- 2,763 34,437 34,823 20,870

Finance costs 164,482 86,595 247,405 243,901 249,558

Profit/(Loss) before taxation

6,298,632 (27,292,52

1) (21,669,58

4) 24,599,56

2 852,601

Income tax expense (credit)

- - - - -

Profit/(Loss) after taxation

6,298,632 (27,292,521)

(21,669,584)

24,599,562

852,601

Figure 2 below shows extracts from the former TILILBEI income statements.

Figure 2: TILILBEI income statements

There was sharp decline in the total revenue in the 2013/14 financial year and

then increased. The administration and operation and maintenance costs have

throughout the years been decreasing from over the past five years.


(b) Statement of Financial Position

I. The Former KEWASCO Statement of Financial Position The analysis of the statement of the financial position for the period 2012/13

to 2016/17 is captured in Table 5.

Table 5: The Former KEWASCO Statement of Financial Position

2012/13 2013/14 2014/15 2015/16 2016/17


Assets

Non-current Assets

Property, plant and equipment

24,823,908

20,409,842

17,910,298 14,882,121

25,294,058

Current Assets

Inventories 2,538,718 1,205,313 2,030,602 1,979,248 13,006,902

Trade and other receivables

60,581,290

73,703,461

98,400,387 36,674,204

93,304,879

Cash and Bank balances

3,670,301 1,916,441 1,224,452 3,395,353 4,340,189

Staff Receivables 4,316,652

66,790,309

76,825,215

101,655,442

42,048,805

114,968,621

Total Assets 91,614,217

97,235,057

119,565,740

56,930,926

140,262,679

Percentage growth 6% 23% -52% 146%

Shareholders’ Funds and Liabilities

Capital and Reserves

Share capital 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000

Capital reserves -2,429,375

-2,429,375

-2,429,375 -2,429,375

-2,429,375

Revenue reserves -19,340,020

-16,900,982

-31,422,810

-33,328,802

-37,373,615

-13,769,395

-11,330,357

-25,852,185

-27,758,177

-31,802,990

Non-Current Liabilities

Loan 5,763,947 2,849,202 1,440,232 753,459 3251605

Deferred liability 17,007,359

17,007,359

17,007,359 17,007,359

Customer deposits 7,122,475 7,982,325 8,944,825 9,015,523 12,515,250

Staff gratuity 5,155,150 1,296,694 4,160,722 4,160,722 4,160,722


35,048,931

29,135,580

31,553,138

13,929,704

36,934,936

Current Liabilities

Trade and other payables

6,712,005 15,898,481

18,263,232 16,142,602

71,483,465

Overdraft 3,152,869 3,504,335 25,660,466 355,261

-

Agency current account

53,928,466

60,027,016

66,136,989 45,637,236

50,172,068

Amount due to related party

6,541,340 0 3,804,100 8,615,300 13,475,200

70,334,680

79,429,832

113,864,787

70,750,399

135,130,733

Total shareholders’ funds and liabilities

91,614,216

97,235,055

119,565,740

56,921,926

140,262,679

Figure 3 below shows extracts from KEWASCO’s Statement of Financial

Position

Figure 3: KEWASCO Statement of Financial Position

The Non-current assets and current assets increased from 2012/13 to

2014/15 before declining in 2015/16 and steeply increasing in 2016/17/ The

Non-current and current assets have been experienced a slight dip in the

2015/16 financial year.

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

2012/13 2013/14 2014/15 2015/16 2016/17

Non-current Assets

Current Assets

Non Current Liabilities

Current Liabilities


II. TILILBEI Statement of Financial Position The analysis of the statement of the financial position for the period 2012/13

to 2016/17 is captured in Table 5.

Table 6: TILWASCO Statement of Financial Position

2012/13 2013/14 2014/15 2015/16 2016/17


Non-current Assets

Property, plant and equipment

537,025 810,298 660,867 3,849,617 4,842,946

Intangible Assets 188,700 150,960 - - 278,305

WIP WSTF Projects 8,117,720 - - - -

8,843,445 961,258 660,867 3,849,617 5,121,251

Current Assets

Inventories 673,911 638,883 591,434 5,511,381 3,451,442

Trade and other receivables

75,247,354 75,567,283 77,915,935 79,212,173 81,835,786

Cash and bank balances

7,038,065 13,539,868 6,072,969 5,941,143 5,929,696

82,959,330 89,746,034 84,580,338 90,664,697 91,216,924

Total Assets 91,802,775 90,707,292 85,241,205 94,514,314 96,338,175

Percentage growth

Shareholders’ Funds and Liabilities Capital

(1.2%) (6.0%) 10.9% 1.9%

Ordinary share capital 100,000 100,000 100,000 100,000 100,000

Capital reserves 31,421,989 31,421,989 31,421,989 31,421,989 31,421,989

Retained earnings 7,150,170 (20,142,351) (41,811,935) (17,212,373) (16,359,772)

Total Capital Reserves 38,672,159 11,379,638 (10,289,946) 14,309,616 15,162,217

Current Liabilities

Trade and other payables

25,070,403 73,072,190 87,633,735 70,300,808 69,507,090

Retirement benefit obligations

- 6,255,464 7,897,416 9,903,890 11,668,868

Customer deposits 6,247,015 - - - -

Related party transaction

21,813,198 - - - -

Total current liabilities

53,130,616 79,327,654 95,531,151 80,204,698 81,175,958

Total equity and liabilities

91,802,775 90,707,292 85,241,205 94,514,314 96,338,175


Figure 4 below shows extracts from TILILBEI’s Statement of Financial Position

Figure 4: TILWASCO Statement of Financial Position extracts

The current assets experienced a slight declined in 2014/15 before increasing

in the 2015/16 and 2016/17 financial years. While the total current assets

rose from 2012/13 to 2014/15 before experiencing a decline in the 2015/16

and 2016/17 financial years.

There is therefore need for the company to enhance efficient utilization of

assets for maximum returns.

3.2.3 Non-Financial Performance

I. KEWASCO Non-Financial Performance An extract of KEWASCO’s past non-financial performance for the period 2014/15

to 2016/17 is as captured in Table 7.

Table 7: KEWASCO Non-Financial Performance

2014/15 2015/16 2016/17

Water production (m3) 3,425,038 3,606,465 3,429,045 Water available for sale (m3) 3,140,206 3,404,405 3,285,119 Water Sold (m3) 1,584,291 1,752,355 1,749,093 Water Unaccounted For (m3) 1,555,915 1,669,037 1,536,026 NRW (%) 50% 49% 47% Number of sewer connections 4,710 4,930 5,138 Number of active water connections ( billed)

10,757 11,577 11,857

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

2012/13 2013/14 2014/15 2015/16 2016/17

Non-current Assets

Current Assets

Total current liabilities


It is noted that the former KEWASCO had very high Non Revenue Water (NRW)

averaging 48% in the financial year 2016/2017 which exceeded the WASREB

NRW benchmark of 25%. In view of this, the merged Company has identified

NRW reduction as a key strategic theme in its 2018 -2023 Strategic Plan; with

the company aiming to reduce NRW from 50% in 2018 to 30% by 2023.

3.3 ENVIRONMENTAL ANALYSIS

In the process of preparing the Strategic Plan, KEWASCO undertook an

environmental analysis aimed at determining emerging issues that need to be

addressed or considered during the plan period. The analysis was undertaken

through Political, Economic, Socio-cultural, Technological, Ecological and Legal

(PESTEL) and Strengths, Weaknesses, Opportunities and Threats (SWOT)

models. The results are as follows:

3.3.1 PESTEL Analysis

Factor Issues Effect Mitigation Measures

Political Changes in government policies

Conflict in the trans boundary water sources

Competition of water resources

Collaboration with County Governments

Continuous and timely review of policies and procedures to align with prevailing changes

Political interference

Interference with the company’s operations

Adhere to company policies and procedures

Economic Inflation High interest

rates Unemployment

Low purchasing power among consumers

High cost of doing business

Declining inflow of development partners’ support

Pro poor initiatives Adopt cost saving

measures Tariff review

Inadequate government subsidy

Low infrastructure development

Strengthen collaboration and partnership with development partners and private sector players.

Explore innovative financing


Factor Issues Effect Mitigation Measures

Social-cultural environment

High population growth rate

Increased water demand

Serve the un-served population within KEWASCO’s jurisdiction

Water is a basic human right – hence attitude for free access

Non-payment for water supplied

Create awareness and adhere to company policies

Strengthen and equip NRW unit

Inefficient water usage by consumers

Loss of water/revenue

Customer education Improve on response

time

Technology Technological advances

Reduction of Non-Revenue Water

Cost reduction Improved quality

of service delivery

Promote the utilization of ICT in service delivery e.g. GIS, leak detection equipment, illegal connection, minimum night flow measurements, isolation of DMAs, Meter Reading, Billing, Accounting system, HR system, customer care system, Mpesa, Procurement, fleet management, Payroll

Ecological Natural disasters e.g. floods

Destruction of water infrastructure and disruption of operations

Construction of floods mitigation dams

Climate change

Diminishing water resources

Creating awareness on environment conservation

Waste management

Poor management of waste will lead to environment pollution

Use of modern waste management technologies

Legal Changes in legislations that affect WSP e.g. Water Act 2016

Legislation will change management of water resources and water services

Adhere to the new legislation

3.3.2 SWOT Analysis


Analysis of the internal environment was carried out in order to identify factors

within KEWASCO that may influence performance positively (strengths) or

negatively (weaknesses).

STRENGTHS 1. Good water quality. 2. Minimum competition – There is

little competition for water and sanitation services provision.

3. Uptake of technology. 4. Gravity fed system in the urban

service area– low electricity cost. 5. Professional and skilled

management. 6. Good customer base.

WEAKNESSESS 1. Dilapidated infrastructure – piping

system – causes loses and increases maintenance cost.

2. Due to financial constraints – the organisation has not been able to meet its obligations e.g. statutory payments and pension payments for staff.

3. Poor Operation and Maintenance affects service delivery to customers.

4. High NRW due to dilapidated infrastructure and illegal connection.

5. Communication lapses and weak dissemination of information.

6. Customer and staff malpractice. Collusion for illegal connections

7. Aging workforce. 8. High cost of production in the rural

areas that use pumping water system.

9. Demotivated workforce in the rural service area due to unpaid salaries and lack of finances to facilitate their work.

10. Poor transportation which hinders surveillance and maintenance work in the rural service area.

11. Inadequate succession planning. 12. Inadequate office space in

KEWASCO Head office.

OPPORTUNITIES 1. Open a subsidiary company for

bottling water for County Government functions. Kericho has good quality water supply from the Mau Forest Complex.

2. Explore reusable energy power

THREATS 1. Demand notice from KRA and other

suppliers can affect daily operations.

2. Political goodwill. Any interference during and after the merger can cripple operations.


sources such as solar power and hydro.

3. Upgrade the sewerage plant in the urban service area to meet current demand.

4. Set up a sewerage plant in the rural service area to serve customers. Value addition of sludge to make briquettes and manure for sale.

5. Increase water production by setting up new water treatment plants.

6. Explore gravity water systems in the rural service area.

7. Upgrade raw water schemes to full treatment water schemes.

8. Take advantage of economies of scale after merger which will lead to reduction on purchase costs.

9. The merger will help attract more development partners for financing and collaboration in projects

3. KEWASCO rural service area get bulk water from Bomet County, operations can be crippled if Bomet County stops this supply.

4. Inability to have an effective cost recovery in KEWASCO rural service area due to its low tariff.

5. LVSWSB and County conflicts can affect operations.

6. Kericho County Government may stop subsidising Tililbei (KEWASCO rural service area) operations putting a financial strain on KEWASCO urban service area.

7. Vandalism of water and sewer infrastructure.

8. Fluctuations in economic factors such as inflation, exchange and bank lending rates can increase cost of doing business.

9. Illegal connections leading to high NRW.

10. Defaulters of water bills which affects collectable revenue.

3.4 STAKEHOLDER ANALYSIS

A stakeholder is any person, group or institution that has an interest in the

activities of an organization. KEWASCO has many stakeholders in its core

functions some of whom are identified in Table 8.

Table 8: KEWASCO Stakeholders

Stakeholder Stakeholder Expectation KEWASCO Expectation

1. Ministry of Water and Irrigation (MWI)

Deliver on the mandate Compliance with the Water

Act 2016 and other relevant regulations

Existence of an enabling environment

Provide sector policy direction

2. Water Services Regulatory Board (WASREB)

Compliance with the regulatory rules and guidelines

Efficient utilisation of resources

Equity in regulation Prompt approval of tariff

3. Water Sector Trust Fund (WSTF)

Generation of feasible project proposals.

Proper use of funds Proper and timely

Fair distribution of resources

Timely release of funds



implementation of projects

4. Water Tribunal Compliance to service standards and regulations

Timely resolution of conflicts.

5. Water Resource Authority (WRA)

Compliance with water permits rules

Support in conservation effort

Effective management of water resources

Conservation of water resources

6. National Environment Management Authority (NEMA)

Compliance with the EMCA Act 1999 and other relevant regulations

Conservation of the environment

7. Lake Victoria South Water Services Board/Water Works Development Agency)

Deliver on the mandate Compliance with the Water

Act 2016 and other relevant regulations

Efficient utilisation of resources

Fairness in the regulation of WSPs under its jurisdiction

Timely dissemination of information

Provision of resources for infrastructure development

8. County Government Delivery of quality water and sanitation services.

Collaborating in project planning and implementation.

Employment to residents The water service provider

should be self-sustainable Implement strategic

decision Involvement in decision

making on Water Sector Corporate Social

Responsibility (CSR)

Provide enabling environment

Funding for water and sanitation projects

Development of infrastructure and water master plan

Involvement in water policy development and planning

Effective participation during board meetings

Professional and expert representation in the BOD

Participate and mobilise residence in stakeholder forums

Prioritise water sector in terms of resource allocation

Financial subsidies for operations

9. Development Partners Accountability for funds provided

Provision of timely and accurate reports

Financial and technical support

Adherence to MoUs and contract terms



Timely and accurate updates on the implementation status of projects

10. Financial Institutions

Timely settlement of financial obligations

Competitive credit terms and conditions

Prompt services provision

11. Water consumers/general public

Provision of adequate water and sanitation services

Affordable rates for water and sanitation services

Quick response to complaints and prompt repairs of bursts

Accurate bills produced on time

To be treated with courtesy by KEWASCO staff

Prior communication on service disruptions

Participate in stakeholder forums

Employment for the community

Reliable meters

Prompt payment of water and sanitation services

Report cases of vandalism of the water and sanitation infrastructure

Participate in public forums

Notify KEWASCO of pipe bursts

Provide labour for trench excavation

Lobby through leadership of MCAs and MPs with the county government. Good mobiliser

Honesty and avoid illegal connections.

12. The Media Provision of accurate and timely information

Fair and accurate reporting

Support in public awareness campaigns.

13. Service providers Fairness and equal opportunity

Prompt payment for goods and/or services rendered

Provision of adequate information

Quality products and services

Prompt delivery of goods and services

Adherence to the terms of contract

14. Learning and Research Institutions

Opportunity for student attachments and internships

Competent manpower Support for relevant

research/studies

15. Board of Directors

Implementation of developed policies

Achievement of the Company’s objectives

Policy direction Support in resource

mobilization Good corporate

governance

16. KEWASCO Staff Job security and sustainability of the Company

Provision of quality services to the company

Commitment to the



Professional development and training

Competitive and equitable remuneration

Healthy, safe and secure working environment

Intrinsic motivation such as recognition and appreciation

Extrinsic motivation such as salary increment and bonuses

Prompt payment of monthly salary

Proper dissemination of information and communication by the company

Company’s mandate Innovation, creativity and

optimal productivity, team-spirit, integrity

Professionalism Public relations – respect

our stakeholders Accountability, respect

and discipline

17. Water Services Providers Association

Participating in WASPA events

Sharing KEWASCO’s experiences and best practices with other WSP’s

Provide benchmarking forums

Provide best practice cases

Capacity building

18. Kenya Bureau of Standards

Compliance with KEBS standards

Set standards for water and sewer services

Quality assurance of water and sanitation products e.g. water meters

19. National Water Harvesting and Storage Authority

Use water resources efficiently

Ensure quality of waste water discharged into the environment meets the required standards

Provides strategic water storage for Kericho County


CHAPTER FOUR

STRATEGIC ANALYSIS

4.1 STRATEGIC THEMES

Strategic themes are the key performance areas in which an organization must

excel in order to achieve its Vision and Mission, and deliver value to customers.

They are the organization's pillars of excellence. The strategic themes of

KEWASCO for the planning period are:

1. Non-Revenue Water (NRW) Management

2. Water and Sanitation infrastructure

3. Operational efficiency

4. Financial Sustainability

5. Customer Focus

6. Institutional Restructuring

4.1.1 Non-Revenue Water Management

Non-Revenue Water (NRW) is defined as the difference between the amount of

water a Water Utility supplies to the distribution system and the amount of

water billed. This is basically a reduction in water available for sale, and thus

results in loss of revenue. NRW is caused by both physical and commercial

losses. Huge volumes of clean water are lost through leaks and bursts and due

to metering inaccuracies at consumers and illegal water use.

KEWASCO has experienced high levels of NRW (48%) compared to sector

benchmark of less than 25%. The high level of NRW is attributable to water

loss due to aging pipe network, invisible leakages, frequent bursts, pipe

damage, meter tampering, illegal water use, meter inaccuracies, under read

and unread meters. To reduce NRW, there is need for the company to ensure

prompt maintenance of the water infrastructure, effective pressure

management and management of customer database for accurate and prompt

billing. There is also need for quick response to water bursts and illegal

connections.


4.1.2 Water and Sanitation Infrastructure

The current water and sewer coverage in KEWASCO’s area of jurisdiction is still

low, thus there is need to expand the scope of its water and sanitation services.

To achieve this, there is need to develop a water reservoir, new water treatment

plant, expand existing supply network to un-served and underserved areas and

rehabilitate the existing water distribution system by replacing uPVC and AC

pipes with more durable and pressure resistant pipe materials (HDPE and

PPR). Further, construct and rehabilitate water kiosks with overhead storage

tanks in the low-income areas. This will ensure sustainability of water supply

to customers. Further, the Company will expand the area under sewer through

development of a Sewerage Treatment Plant and Decentralised Treatment

Facilities (DTF) as well as expanding the Sewer Network.

4.1.3 Operational Efficiency

To achieve high levels of customer service and profitability, the company needs

to improve its operational efficiency. KEWASCO plans to streamline its

processes and also put in place appropriate operational policies and

procedures that will help in improving effectiveness and efficiency in service

delivery. This will aid the Company in ensuring reduction in operational costs

hence increasing the profitability. To achieve this, the company is committed to

mainstreaming ICT in its operations such as GIS mapping, isolation of District

Metering Areas (DMAs), meter reading, billing, Mpesa/bank integration system,

Tank level monitoring, reading of master meters, accounting, fleet

management, payroll management, and online payment of salaries among

others.

4.1.4 Financial Sustainability

In order for KEWASCO to achieve financial sustainability, there is need to

mobilize adequate resources to finance infrastructure development and

maintenance. In addition, the Company will explore other sources of revenue

such as bottling of water, hiring out of exhauster services, increase Water

Bowsers and briquette/manure making from sludge. Other conventional


sources of revenue include improvement of water and sewer services through

having an optimal tariff structure, improving collection efficiency. Further, the

company plans to pursue strategies aimed at increasing customer base

through more connection, reviving dormant accounts, metering unmetered

customers, regularise illegal consumers and reduce NRW.

4.1.5 Customer Service

To meet the needs of its customers and enhance customer satisfaction,

KEWASCO is committed to maintaining high standards of its service delivery.

To achieve this, the company will enhance adherence to the Customer Charter,

implement a Customer Relationship Management System as well as strive to

maintain a 24 hour service. Further, the Company intends to train all its staff

on effective customer relationship management. The Company will also carry

out Customer Satisfaction Surveys, hold customer weeks and introduce best

customer performance recognition and award.

4.1.6 Institutional Restructuring

To achieve its vision and mission, KEWASCO requires adequate human

resource capacity with the necessary skills and competences. The approved

Organization Structure and staff establishment should be operationalized in

order to drive the planned growth. In addition, enhancing staff capacity and

performance management will also be necessary in ensuring staff motivation

and productivity. The Company therefore plans to develop and implement

strategies that will enhance staff engagement and work performance. Further,

to ensure staff are adequately motivated, the company needs to provide

adequate office space, a conducive working environment, proper remuneration,

working tools and equipment.


4.2 STRATEGIC OBJECTIVES AND STRATEGIES

The strategic objectives and the respective strategies under each of the

thematic areas are captured in Table 9.

Table 9: KEWASCO Strategic Objectives

Theme Objective Strategy

1. Non-Revenue Water

To reduce the non-revenue water from 50% in 2018 to 30% by 2023

i. Develop policies and regulations to assist in NRW management

ii. Train staff on NRW management, tools and equipment

iii. Rehabilitation of water distribution network through replacement of uPVC pipeline distribution network with HDPE and PPR pipes

iv. Isolation of supply areas into DMAs and sub DMAs for measurement of NRW

v. Meter Replacement /Servicing. Ensure 100% metering ratio from 70%

vi. Reduce response time to bursts and leakages to 8 hours

vii. Minimize illegal use of water

2. Water and Sewerage Infrastructure

To increase water production from 16,000 m3 per day to 32,000 m3 per day by 2022

i. Construction of 3million m3 capacity dam along Kimugu River to enhance water supply sustainability. Others include Koru dam, Londiani (Masaita) and Bosto dams

ii. Construction of 13,000m3 Kimugu water treatment plant

iii. Construct Kusumek Mini Hydro for pumping water

iv. Upgrade raw water schemes to treated water schemes

v. Resource mobilization from financiers to assist in infrastructure development



To expand sanitation coverage from 40% to 55% by 2022

i. Construction of a Sewerage Treatment Plant in Londiani, Kericho, Litein/Kapkatet and Kipkelion.

ii. Construction of Decentralised Treatment Facilities in the rural service area and satellite towns of Kapsoit, Brooke, Kapsuser and Chepseon, Sosiot, Fort Ternan, Roret and Kipsitet

iii. Construction of Sanitation Blocks at Ngoino Road and Londiani Junction

iv. Extension of existing sewer infrastructure in the urban service area

v. Construction of onsite sanitation treatment facilities and stabilization ponds in the urban areas

To increase water and Sanitation Coverage in low income areas annually by 10%

i. Establish a record system and Procedure for regular update for all information in low income areas

ii. Mapping of all LIAs and update as required

iii. Carry out baseline Survey to update population figures and service levels

iv. Carry out needs assessment and prioritization of intervention in low income areas

v. Continue finance mobilization for upscaling basic sanitation for the Urban Poor

vi. Create a budget line for pro poor department in the Master Budget



3. Operational Efficiency

To ensure that there is continuous provision of water and sanitation services with minimal interruptions

i. Adherence to the preventive maintenance schedule

ii. Ensure availability of stand-by pump set and generators

iii. Maximising on working hours. Time management

iv. Timely payments of suppliers and other obligations

v. Provision of protective gear vi. Timely response to bursts and

leakages 4. Financial

Sustainability

To increase revenue from Kshs 204 million in 2018 to Kshs 400 million by 2023

i. Increase the metering ratio ii. Optimize billing efficiency iii. Enhance meter reading efficiency

to manage on commercial losses iv. Timely revision of tariff

To improve collection efficiency from 92 % in 2018 to 98% by 2023

i. Enhance the Integrity in revenue department by setting up control measures

ii. Ensure all bills are paid within the grace period

To implement Cost reduction measures

i. Reduce of non-core expenditures ii. Ensure 100% adherence to the

budget iii. Reduction in personnel and

operation and maintenance costs 5. Customer

Service To increase customer satisfaction by 10% annually

i. Revise and implement Customer Service Charter

ii. Timely response to customer complaints

iii. Continuous customer sensitization/education through newsletters and publications

iv. Hold stakeholder fora v. Hold Open days/ customer days

at KEWASCO to address customer issues

vi. Carry out a customer satisfaction survey every two years and implement corrective measures

vii. Develop a Communication Plan viii. Enhance involvement of

Water Action Groups



6. Institutional Restructuring

To have a qualified, experienced, motivated workforce

i. Assess and carry out job evaluation of existing workforce

ii. Operationalise KEWASCO organogram and align staff in the departments within one year.

iii. Enhance performance management through performance appraisals and reward

iv. Provide a conducive working environment

v. Enhance organisational culture change

vi. Evaluate the scheme of service vii. Conduct a training needs

assessment in the next one year viii. Carry out Capacity building of

staff through continuous training.

ix. Develop a succession plan/policy Operationalize institutional restructuring of the merged KEWASCO and TILWASCO to one highly performing water utility by 2023

i. Dissolution of existing companies

ii. Amending MoU and Articles of Association

iii. Stakeholders engagement iv. Preparation of County Subsidy

proposal to TILWASCO Cost Centre

v. Preparation of Assets and Liabilities register

vi. Preparation of a harmonized tariff structure

vii. Application of Service Provision Agreement (SPA)

viii. Appointment of Board of Directors

ix. Operationalize the recommended organizational structure of the new water utility within one year

x. Enhance performance management through performance appraisals and reward

xi. Provide a conducive working environment



xii. Harmonization of pay structure xiii. Enhance organizational culture

change xiv. Develop a succession plan/policy xv. Prepare a Scheme of Service


CHAPTER FIVE

IMPLEMENTATION PLAN

5.1 IMPLEMENTATION THEMES AND OBJECTIVES

THEME 1: NON-REVENUE WATER MANAGEMENT Objective 1: To reduce the non-revenue water to 30% by 2022 Strategy Expected Outcome

(s) Activities Output Indicator (s) Implementing

Actors Time Frame

Reduction of NRW

Reduction of NRW to 30% by 2022

i. Formulation of NRW Policy

ii. Train staff on NRW management, tools and equipment

iii. minimize illegal use of water

Approved and implemented NRW Policy

BOD & MD by 2019

iv. Increase the metering ratio from 70% to 100%

80% metering in 2yrs 90% in 3 yrs 100% in 5 years

CFM & TM June 2023

v. Replacement of UPVC pipes with HDPE and PPR

10% replacement of assorted HDPE and PRP pipes annually

CMT, CGoK, and Strategic Partners

by 2023

vi. Quick response to repairs from 12 hours to 8 hours

Reduced response time from 12 hrs to 8 hrs

TM by 2020

vii. Isolation of Sub DMA’s

Isolation of sub DMAs in areas A, B, D and E of Kericho Water within 2years

Litein and Kapkatet towns within 2 years

The others within 5 years plan period

TM & GIS June 2019 June 2023


THEME 2: WATER AND SEWERAGE INFRASTRUCTURE Objective 2.1: To increase water production from 16,000 cubic metres per day to 32,000 cubic metres per day in the next 5 years. Strategy Expected Outcome


Actors Time Frame

Construction of a 13,000 m3 capacity treatment plant in Kericho and 2,500 m3 capacity Kusumek treatment plant in Litein

Reliable and safe water supply.

i. Conduct feasibility, detailed design reports and tendering

ii. Mobilise for funds from development partners and CGoK.

iii. Undertake the construction of treatment plants

i. Feasibility study report on the identified locations

ii. Presentations to the County Government & development partners

iii. 13000m3 and 2500m3 per day capacities treatment plants

TSM M.D

December 2018 December 2018 By 2020

Construction of a 3 million m3 Kimugu dam

i. Conduct feasibility, detailed design reports and tendering

ii. Mobilise for funds from development partners and CGoK.

i. Feasibility study report on the identified locations

ii. Presentations to the County Government & development partners

TSM M.D County Government LVSWSB

By 2021

Upgrading of raw water to treated water schemes

i. Preparation of detailed design for water treatment works

ii. Construction of treatment works

i. Plant and raw water schemes upgrade

TSM & CFM By 2020

Objective 2.2: To expand sanitation coverage from 40% to 60% in the next five years. Strategy Expected Outcome


Actors Time Frame

Construction of on-site sanitation facilities at Kapsoit, Brooke, Kapsuser,

8No. Onsite sanitation facilities with total capacity 800 M3 per day

i. Mobilize financial resources from Development Partners and CGoK.

Reduce in Open Defecation

TSM June 2019


Strategy Expected Outcome (s)

Activities Output Indicator (s) Implementing Actors

Time Frame

Chepseon, Sosiot, Fort Ternan, Roret and Kipsitet

ii. Application for approvals from NEMA.

Increase in revenue from sewerage services

M.D October 2019

iii. Undertake the construction of Onsite sanitation facilities.

Improvement in environmental health.

TSM & CFM August 2020

Construction of a 790m3 capacity per day Sewerage Treatment Plant in Londiani Construction of sewerage treatment plants in Kericho, Litein/Kapkatet and Kipkelion.

Increase in sanitation coverage

i. Mobilize financial resources from Development Partners and CGoK.

ii. Application for approvals from NEMA.

iii. Undertake the construction of Onsite sanitation facilities.

i. Onsite sewerage project

ii. Increase in sewer Connection

MD and TM December 2019

Extension of existing sewer infrastructure in the urban service area

Increase in sanitation coverage

i. Mobilize funds for sewerage connection

ii. Construct and lay the infrastructure

Increase sewerage connections

CFM Continuous

Construction of Sanitation Blocks at Ngoino Road and Londiani Junction

i. Mobilize funds for sewerage connection

ii. Construct and lay the infrastructure

TM 2019

Increase water and Sanitation Coverage in low income areas by 10% each year

Improved Water and Sanitation coverage in LIAs

i. Establish a record system and Procedure for regular update for all information in low income areas

ii. Mapping of all LIAs and update as required

iii. Carry out baseline Survey to update population figures and service levels

iv. Carry out needs assessment and prioritization of intervention in low income areas

v. Regulate Kiosk operators vi. Finance Mobilization for

i. Data base for LIAs ii. Mapped LIAS and

updated in Maji data iii. Updated Population

figures

iv. Signed Contracts

CFM, Pro Poor Coordinator, TM

2019




Time Frame

Upscaling Basic Sanitation for the Urban Poor

vii. Create a budget line for pro poor department in the Master Budget


THEME 3: OPERATIONAL EFFICIENCY Objective 3: To ensure that there is continuous provision of water and sanitation services with minimal interruptions Strategy Expected Outcome


Actors Time Frame

Time management Reduction in lateness, idleness

i. Setting well-defined roles. Proper Job Description for all.

HRAM July 2018

ii. Weekly time sheets and daily job cards for evaluation

iii. Monthly attendance register analysis

iv. Introduce departmental clocking register

v. Maximising on working hours.

vi. Timely response to bursts and leakages

Report on total tasks/duties accomplished per day/week versus the time used. Reduction in the number of complaints Improve on response time. Improved staff productivity Reduced NRW and customer complaints

HRAM/Dept Heads TM

December 2018

Adherence to the preventive maintenance schedule

Reduced down time i. Timely payments of suppliers and other obligations

ii. Ensure availability of stand-by pump set and generators

iii. Provision of protective gears

Maintained re-order levels Uninterrupted water production and supply Minimal work place injuries

PM, CFM TM, CFM, PM HRAM, TM

continuous

Embrace ICT in all Areas of Operation

Improved operational efficiency

i. Networking of branch offices

ii.Decentralization of operational software

iii. Continuous improvement of billing system

iv. Continuous addition of software

v. GIS mapping of water appurtenance and low income area

vi. Integration of billing system with the Website

Teleworking from all the branches Access to software from all the branches Efficient service delivery Reliable reports

ICTM, PM, CFM


vii. Procure and maintain ICT infrastructure

THEME 4: FINANCIAL SUSTAINABILITY

Objective 4: To increase revenue from Kshs.204 million in 2018 to Kshs.400 million by 2023 Strategy Expected Outcome (s) Activities Output Indicator (s) Implementing

Actors Time Frame

Financial Sustainability

1. Increase billing from:

17M – 19.5m by 2018 19 m by 2019 21 mil by 2020 32 mil by 2021 33.3 mil by 2022

i. Improve meter reading from 70% -100%

ii. Enhance meter reading efficiency to manage on commercial losses

iii. Optimize billing efficiency

iv. Timely revision of tariff

100% meter reading CFM 3 months

v. Re-evaluation of average assessment on unmetered customers annually

vi. Operate new water treatment plants

Re-evaluate 1500 customers

1 yrs

vii. Continuous supply of water

Customer satisfaction 5 yrs

2. Improve collection efficiency from 90% to 98%

i. Enhance the Integrity in revenue department by setting up control measures

ii. Strict adherence to 7day payment grace period

Increased collection efficiency

CFM

Immediately

iii. SMS alert notices on mass disconnection

iv. Mass disconnection

Quarterly

v. Entering to part payment agreement with

Immediately


customers with huge bills

vi. Appoint Debt Recovery Teams

vii. Enlist defaulters with Credit Reference Bureau (CRB)

Annually

3. Cost reduction i. Reduce of non-core expenditures

ii. Ensure 100% adherence to the budget

iii. Reduction in personnel and operation and maintenance costs

CFM, PM

HODs

MD, CFM, HRAM, PM


THEME 5: CUSTOMER SERVICE

Objective 5: To increase customer satisfaction by 10% annually Strategy Expected Outcome


Actors Time Frame

Customer Service Reduced customer complaints

i. Revise and implement Customer Service Charter

ii. Conducting 28 customer sensitization forums per year (two per scheme/Area)

iii. Hold Open days/ customer days at KEWASCO to address customer issues

Sensitised customers CFM annually

iv. Response to customer complaints as per service Charter

v. Carry out a customer satisfaction survey every two years and implement corrective measures

Satisfied customers within minimum service levels

THEME 6: INSTITUTIONAL RESTRUCTURING Objective 6.1: Operationalize institutional restructuring of the merged KEWASCO and TILWASCO to one highly performing water utility by 2023 Strategy Expected Outcome

(s) Activities Output Indicator (s) Implementi

ng Actors Time Frame

Operationalization of the new water utility – KEWASCO

A self-sustaining WSP for Kericho County

i. Dissolution of existing companies

ii. Amending MoU and Articles of Association

iii. Stakeholders engagement iv. Preparation of County

Subsidy proposal to TILWASCO Cost Centre

v. Preparation of Assets and Liabilities register

vi. Preparation of a harmonized tariff structure

New Company Amended Articles

and Memorandum of Association

Minutes of stakeholder engagement

Subsidy proposal document

Assets and Liabilities register

New Tariff

County government/BoD/CMT

June 2018




Time Frame

vii. Application of Service Provision Agreement (SPA)

viii. Appointment of Board of Directors

ix. Operationalize the recommended organizational structure of the new water utility within one year

x. Enhance performance management through performance appraisals and reward

xi. Provide a conducive working environment

xii. Harmonization of pay structure

xiii. Enhance organizational culture change

xiv. Develop a succession plan/policy

xv. Prepare a Scheme of Service

New SPA Letters of

Appointment of BoD and Top management

Functional Organizational structure

Objective 6.2: To have a qualified, experienced, motivated workforce Strategy Expected

Outcome (s) Activities Output Indicator (s) Implementing

Actors Time Frame

Conduct departmental staff skills audit/ Training Needs Assessment

Areas for Capacity Building

i. Develop and administer questionnaires

ii. Data analysis.

Capacity Building manual.

HRAM, all departmental heads

July 2018

iii. Prioritize training needs areas and prepare a budget

iv. Source for trainers/institutions

Training work plan/budget

Trainings/workshops report

Assessment of the usefulness of training from the trainer/institution

Training Certificate

HRAM. Aug 2018 Sept

2018 Annually


5.2 STRATEGIC PLAN IMPLEMENTATION COORDINATOR

The previous Strategic Plan for former KEWASCO and TILWASCO were fairly implemented. In order to ensure that KEWASCO Strategic Plan is implemented successfully and realize its Vision and Mission aspirations, it is recommended that a Coordinator and an Assistant be appointed to track and coordinate implementation of the activities of the Strategic Plan. The work of the coordinator is to spearhead the implementation of the activities and ensure the timelines are adhered to.


CHAPTER SIX

INSTITUTIONAL STRUCTURE

KEWASCO Organizational structure consists of the Board of Directors, Managing Director, Six Departments and four Divisions. All except the Internal Audit department reports directly to the Managing Director, while the Internal Auditor reports to the Board but functionally operates under the Managing Director. Below is the organization structure for KEWASCO.


CHAPTER SEVEN

STRATEGIC FINANCIAL PLAN

This is the long-term Road Map for implementing the strategic objectives set out for

the next 5 years. This Plan will provide a perspective on how KEWASCO will commit to

undertake the activities set out under each objective and how success will be

measured. The Financial Plan will describe each activity, resource, equipment and

material needed to achieve the Strategic Objectives within the stipulated timeframe.

7.1 Funding Alternatives

In order for this Strategic Plan to be successfully implemented, resources mobilization

is key. In this regard, the National Government and County Government of Kericho

will devise ways and means of mobilizing finances from existing and new funding

sources. Such sources include but not limited to the County Government,

Development Partners and internally generated revenues.

7.2 Strategic Financial Plan

The total amount of financial resources required to effectively implement this strategic plan is Ksh 4.286 Billion as summarized in the table below: Table 10: Strategic Financial Plan Theme Expected Cost

(Kshs)

Sources of Funds

1 Non-Revenue Water 82,700,000 Internally Generated Funds, Water and Sewer sales, Public Private partnerships.

2 Water and Sanitation

Infrastructure

4,012,000,000 National Government Allocations Through WSBs, County Government Allocations, Public Private partnerships, Development partners.

3 Operational efficiency 123,350,000 Internally Generated Funds, Water and Sewer sales, Grants from County and National Government, Public Private partnerships.

4 Financial Sustainability 60,300,000 Internally Generated Funds, Water and Sewer sales, Grants from County and National Government

5 Customer focus 2,800,000 Internally Generated Funds, Water and Sewer sales


6 Institutional restructuring 5,000,000 Internally Generated Funds, Water and Sewer sales

Grand Total 4,286,150,000


The Strategic plan is further broken down and detailed as shown in the table below: Theme Objective Investment Costs

(Kshs) Non-Revenue Water To reduce the non-revenue

water to 30% by 2022 Formulation of NRW Policy

200,000 Kewasco-3,000 No meters

15,000,000 Tililbei -8,000 No meters

40,000,000 Prepaid meters for the LIA's-2,000 No

20,000,000

Quick response to repairs from 12 hours to 8 hours

7,500,000

Water and Sewerage Infrastructure

To increase water production from 16,000 cubic metres per day to 32,000cubic metres per day in the next 5 years.

Construction of a 13,000m3 capacity treatment plant in Kericho

1,400,000,000

Construction of a 2,500m3 capacity treatment plant in Litein

700,000,000

Upgrade raw water /partial treatment schemes to fully treatment schemes

Sosiot (1000 m3) 16,000,000 Londiani (1000 m3) 35,000,000 Chesinende (500 m3) 7,500,000 Fort Ternan (500 m3) 10,000,000 Bargeiywet (500 m3) 7,500,000 Kipsitet (1000 m3) 16,000,000 Feasibility Study and detailed design for a dam in Kimugu

7,000,000

Water bottling Plant 2,000,000 To expand sanitation coverage from 40% to 55% in the next five years. This will involve construction and rehabilitation of a Sewerage Treatment Plants

Londiani 790,000,000 Kericho 196,000,000 Litein/Kapkatet-Decentralised treatment facility

20,000,000

Kipkelion 700,000,000 Construction of Decentralised Treatment Facilities in the rural service area and satellite towns.

Kapsoit 20,000,000 Brooke 20,000,000 Kapsuser 20,000,000 Chepseon 20,000,000 Construction of Sanitation Blocks Ngoino Road 6,500,000 Londiani Junction 6,500,000 Implementation of 3rd phase of UBSUP (Nyagacho, Majengo)

12,000,000

Operational efficiency Replacement of assorted UPVC pipes with HDPE and PPR

Sosiot(2Km) 300,000 Londiani(5 Km) 750,000 Chesinende(4Km) 600,000 Fort Ternan(3 Km) 450,000 Bargeiywet(4Km) 600,000 Kipsitet(6 Km) 900,000 Litein(6 Km) 12,000,000 Kapkatet(4 Km) 600,000 Kericho(50Km) 100,000,000 Kapsoit(3Km) 450,000

Creation of DMA’s and Sub DMA’s

Area A 2,000,000 Area B 1,500,000 Area D 2,000,000 Area E 500,000 Area F 700,000

Financial Sustainability To increase revenue from Acquisition of motor cycles(20 4,000,000


Kshs.200 million in 2018 to Kshs.400 million by 2023.

No) Acquisition of vehicles (2no) 11,000,000 Acquisition of vehicles (2no) 15,000,000 Acquisition of water bowser (3no)

25,000,000

Improve metering from 70% -100%

Re-evaluation of average assessment on unmetered customers annually

300,000

Improve collection efficiency from 90% to 98%

SMS alert notices on mass disconnection

5,000,000

Mass disconnection

Entering to part payment agreement with customers with huge bills

Appoint Debt Recovery Teams

Enlist defaulters with Credit Reference Bureau (CRB)

Customer focus To reduce customer complaints Conducting 28 customer sensitization forums per year (two per scheme/Area

2,800,000

Institutional restructuring

Merging of the two water utilities

Operationalization of the new water utility - KEWASCO

5,000,000

7.3 Medium Term Financing Plan

KEWASCO will endeavor to mobilize adequate resources to successfully implement this strategic plan and achieve its vision. The current sources of finance comprise of User Fees (Water and Sewer Billings), grants from the Government of Kenya and concessionary loans from the development partners. In the transition period (medium term) KEWASCO operations will be funded from User Fees (Water and Sewer Billings), the Government, development partners and private investors.

7.4 Long-Term Financing Plan

For the long term KEWASCO plans to achieve financial sustainability by progressively innovating new financing models for mobilizing funds for infrastructure rehabilitation and expansion. The identified sources of financing available to finance capital expenditure are indicated in the table below:

Table 11: Source of Funds for Strategic Plan

No Source of Funding

Summary of how it will be realized

1 User fees from Customers

This is the main source of Revenue for KEWASCO. This comprises of Billings for Water and Sewerage services to consumers operating within its area of jurisdiction.

2 Asset development levy

The Tariff provides for establishment of a sewerage levy. KEWASCO will include in its tariff application a sewerage levy fund to support investment in sewerage infrastructure and connections.

3 Partnerships with KEWASCO will establish formal relationship with the county governments


No Source of Funding

Summary of how it will be realized

county governments

and Water Works Development Boards (Formerly WSBs) in order to access finances for development of Water and Sewerage Infrastructure.

4 Development Partners

Investment requirements for water supply and sewerage infrastructure is normally very high but with low rate of return. There are a few Private organizations that are willing to invest in large WSS projects because of lack of awareness of investment opportunities in this field. KEWASCO will seek donor support, especially for development of Water and Sewerage infrastructures in areas with no adequate water services through grants and concessional loans.

5 Water Services Trust Fund

The Government of Kenya has established a water trust fund whose core duty is to finance the provision of quality water and sanitation services in underprivileged areas of Kenya. KEWASCO will play an active role in helping such communities’ within its area of Jurisdiction access funds from the Trust Fund. This will involve identification of communities without adequate water services and helping such communities to develop proposals and apply for grants from the Water Trust Fund.

6 Public Private Partnerships (PPP)

KEWASCO will source funds from the market through Public private partnership , Issuance of infrastructure bonds , Private equity placements


CHAPTER EIGHT

MONITORING AND EVALUATION

8.1 OBJECTIVES OF MONITORING AND EVALUATION

To be able to attain the desired outcome from the identified strategies, the Strategic

Plan must be carefully implemented. Successful implementation of the plan requires

clarity in decision making, consistent information flow, provision of incentives and

structuring the organization to suit the strategies put in place. Further, there is need

to have a coordinator to oversee the implementation process.

8.2 MONITORING AND EVALUATION (M & E) FRAMEWORK

Monitoring and evaluation of the Strategic Plan will be undertaken a coordinator and

an assistant. The following M & E framework will be put in place in order to ensure

implementation of the strategic plan:

i. The departmental head will be responsible for implementation of activities at

the departmental level.

ii. The coordinator will hold monthly meetings to review on the implementation

plan progress

iii. The departmental heads will develop quarterly reports to the Board on the

progress of the strategic plan implementation.

iv. A midterm review of the strategic plan will be undertaken to ensure that

necessary re-alignment in the objectives, strategies, activities among others

are effected as informed by new information regarding the Company or the

environment.

Note: The key performance indicators in section 8.3 will provide guidance on more

objective review of the progress of the strategic plan implementation.

Kericho Water Supply and Sanitation Company Ltd 2018 – 2023 Strategic Plan


8.3 KEY PERFORMANCE INDICATORS

Table 10 shows the projected key performance indicators (KPIs) for financial and non-financial targets set for the

year 2018 to 2023.

KPI CURRENT 2018/19 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024

Number of water connections 26,415 27,945 29,404 31,078 32,754 37,950 Number of sewerage connections 5,550 5,981 6,913 7,404 7,876 8,457

Revenue (monthly) 18,326,046 19,398,337 20,424,459 21,660,494 22,962,349 24,108,579 Water supply (m3)/day Water billed (m3) 153,802 160,842 167,883 174,924 181,965 189,006 Non-revenue water (m3) 76,901 73,987 70,511 69,970 69,147 66,152

NRW (total %) 50 46 42 40 38 35

Billing efficiency (%) 58 62 65 68 71 74

Water coverage (%) 70 73 76 78 80 82

Collection efficiency (%) 76 83 90 96 96 96 Operating expenses/Total revenue 60 55 50 45 40 35

Customer satisfaction 8 8 9 9 10 10

Employee satisfaction 6 7 7 7 8 8

Number of staff 183 59 195 197 207 207

Number of active staff 183 59 195 197 207 207 Number of staff per 1000 active connections 10 10 10 10 10 10

WASREB ranking 20 15 12 10 9 5

No. of supply hours 24 24 24 24 24 24 Water quality (compliance with KEBS/WHO) (%) 100 100 100 100 100 100


8.4 ACCOUNTABILITY AND RISK MANAGEMENT

8.4.1 Accountability

Timely deployment of resources as well as effective monitoring, evaluation and

reporting of the implementation status is key for the Company to have the intended

impact in provision of water and sanitation services. To enhance implementation, the

Company shall:

i. Effectively communicate the plan to all staff and other key stakeholders to ensure

clarity of vision ,mission and also to seek their support;

ii. Assign and communicate roles and responsibilities to the various implementing

actors;

iii. Mobilize and allocate resources as per prioritized activities identified in the

Strategic Plan;

iv. Develop and communicate quarterly work plans for departments, sections and

individuals in line with the Strategic Plan;

v. Ensure work plans and performance contracting parameters are derived from the

Strategic Plan implementation matrix; and

vi. Carry out Capacity Building of staff on implementation of the Strategies as

necessary.

8.4.2 Risk Analysis

Risk analysis is very critical in order to have a successful implementation plan. Risks

impact potential should be treated in terms of its severity to affect the business.

Implementation of this Plan is likely to face prone to various risks among them,

operational, financial, strategic and technological. The specific risks under each of

these categories are outlined below:

8.4.2.1 Strategic Risks

i. Some stakeholders may oppose some of the proposed programmes/activities.

ii. Weak monitoring, evaluation and reporting may interfere or delay implementation

of the Plan.

iii. Political influences may interfere with implementation of the Plan.


8.4.2.2 Operational Risks

i. Lack of support from key stakeholders.

ii. Inability to synchronize budgeting with procurement plans.

iii. Lack of clear policies and procedures may hinder successful implementation.

iv. Poor integrity of the staff.

v. Aging workforce

vi. Senior staff turnover

8.4.2.3 Financial Risks

i. Inadequate funding may affect the implementation of projects

ii. Delay and default in payments by customers.

iii. Delay in paying suppliers and creditors

iv. Low water tariff

8.4.2.4 Technological Risks

i. Lack of funds to acquire the requisite equipment.

ii. Inability to keep pace with the rapid technological changes.

iii. Resistance to adoption of new technological changes by staff

8.4.3 Mitigation, Monitoring and Reporting of Risks

To mitigate the effects of the above risks, the Company will implement the following

measures:

i. Strategic

Seek consensus among the County leadership and politicians particularly

Members of County Assembly (MCA’s)

Seek effective collaboration and sharing of successes and challenges with

WASREB and other WSP’s

County Government to develop a communication plan detailing the

advantages of one utility as opposed to several utilities in the County; the

communication plan should be disseminated up to the ward level.

ii. Financial- Adopt project/activity-based budgeting and prudent management of

funds.


iii. Operational- Put in place strategies to attract and retain qualified staff, provision of

conducive work environment and development of requisite policies and procedures

for growth.

iv. Technological-keep abreast with changes in technology, undertake upgrading of

equipment and regular training of staff.

v. Enhancing Monitoring, Evaluation and Reporting for early detection and

management of any risk.


ANNEXES ANNEX 1: Other water schemes operated by TILWASCO

Water Scheme

Design Capacity Actual

Production

1. Chesinende Water Supply System 1200 m3 per day 100 m3 per day

2. Londiani Water Supply System 780 m3 per day 400 m3 per day

3. Sosiot Water Supply System 720 m3 per day 300 m3 per day

4. Bargeiywet Water Supply System 80 m3 per day 30 m3 per day

5. Kipkelion Water Supply System 1000 m3 per day 360 m3 per day

6. Sigowet Water Supply System 34 m3 per day Nil

7. Forternan Water Supply System 600 m3 per day 120 m3 per day

8. Kipsitet Water Supply System 480 m3 per day 80 m3 per day

TILWASCO currently does not have a sewer network, however it provides exhauster

services in Litein, Kapkatet and other areas within and outside Kericho County.

strategic plan - kericho

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